Since we plan to be staying in Panama for an extended time, one of the things that is very helpful to have is a local bank account. It would have been incredibly helpful to have one when we bought our car in Panama City - in fact, it probably would have saved us a lot of grief.

We started researching the process for opening a bank account in Panama and talking with other expats. I went to a presentation given by one of the local bank representatives and he touted how easy it is for expats to open an account at his bank. He said you basically just need a couple of reference letters from your US bank and your passport.

I went to work on getting the reference letters from 2 banks with whom we have accounts. One was easy to get - it just took a phone call and they had a letter we could access electronically in just a few hours. Our bank in Hawaii (the Bank of Hawaii) was a pain. The fact we've had our business accounts and personal accounts there for over 7 years didn't seem to matter. A bank reference letter isn't in their standard procedures and they don't do anything that is not in their standard procedures. After threatening to escalate the issue and trying to shame/guilt them into performing this simple task, I got my letter via email a few days later.

Armed with our freshly printed reference letters, Tina and I went to see the gentleman who gave the banking presentation. It turns out (we should have known) that his explanation was a little more simplified than reality. He needed a letter from our Panamanian lawyer, stating we were pursuing residency. Our bank letters needed a special kind of certification (even though I asked him during his presentation if copies of letters were OK), and so on. No can do. Not even close.

I went to 3-4 other banks in Boquete and met with representatives about opening an account. I ran into the same types of documentation requests - some more extensive than others - none that we could meet at this time. We resigned that we would not be able to open an account until we were able to secure additional documentation when we return to the US.

Part of the blame for the difficulty in opening a bank account as a US expat goes on the US government. With the passage of the Foreign Account Tax Compliance Act (FATCA), all US citizens are required to report any foreign bank accounts they own. In addition, foreign banks worldwide are required to report any accounts held at their bank by US citizens to the US Treasury (IRS). That's right, Uncle Sam wants to know where ALL of your money is located. As far as I can tell, the US is the only country in the world that has this requirement. It's a pain for foreign banks to have accounts for US citizens because it's extra reporting, paperwork, and costs. The estimated cost to foreign businesses for implementing FATCA worldwide is $200 billion (source: Wikipedia). No wonder foreign banks aren't throwing the doors open wide for US accounts. I can't say I blame them.

Last weekend we were at a party at some friends' house. The topic of bank accounts came up and we mentioned the difficulty we had in trying to open a new account. A couple of fellow expats told us about people they knew who were able to open a checking account at a bank in David quite easily - with just bank reference letters. We were skeptical that one bank would be that much different than the others but figured it was worth a try.

On Monday, we were going into David for other errands and decided we would stop in at the bank to see about opening an account. After a 20-30 minute wait, we were able to see an English-speaking representative. She asked for our bank reference letters and took them to have someone review them. I had to call one of our banks to get some additional information and the Panama bank apparently also had to call them. It was up in the air for a while, as to whether our bank references would be adequate. The representative continued to enter information on the computer and generated some paperwork for us to sign. Lo and behold, after about an hour and a half, WE HAD A CHECKING ACCOUNT! We were so excited!

The minimum opening deposit for the account was $3,000 - pretty hefty by Panamanian standards. We discussed different ways to fund it and finally figured out the easiest and fastest way was to withdraw money from the ATM at the bank, using a debit card linked to one of our US checking accounts. I called our US bank to have them temporarily increase our daily ATM withdrawal limit. We weren't sure the local bank ATM would let us withdraw that much cash but we gave it a try. The ATM cash withdrawal limit was $500. We made 6 separate withdrawals of $500 each. Fortunately, the ATM is inside the bank lobby and there is an armed guard. I'm sure he was wondering what the heck I was up to. I walked back to the representative's desk with my pockets bulging with cash. She said to take it to the teller window and make the deposit. Mind you, $3,000 is one hundred fifty $20 bills. After I made my way through the bank line (it was lunch time), I piled the money on the teller window and he proceeded to count it. I got my deposit receipt and we both left the bank and decided to get a nice lunch to celebrate. It had taken a couple of hours but it was time well spent.

I know getting a bank account may not seem like a big deal but let me 'splain. Just about everything (and everyone) here in Panama gets paid in cash. Larger stores, like grocery stores and major retailers, will take credit cards. However, most other businesses and services want cash. With our car repair, for example, I had to pay $400 for parts up front and another $500 down payment when the work was started. I had to make both of those payments in cash but a check would have worked (and been easier). If our landlord was local (she's not), we would have to pay our $1,100/month rent payment in cash. We will be getting a check from the insurance company to settle the claim for our car damage ($2,000+). Without a checking account, cashing that check would be rather difficult. So, for us it's a big deal and one more step toward making our expat life a little easier.